Category Archives: CATO

“There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him.”– Robert Heinlein

Solutions time again.

I’ve done a bit of blogging on the subject of US Health Care problems recently, and I could go on. One of the CATO daily podcasts last week (State Health Insurance Mandates Raise Prices) highlighted problems with health care created by government intervention in insurance markets. Just another in a long list of government interferences in the marketplace that negatively impact the system; which they then tell you they can fix by interfering in the system to a greater extent. Another podcast, McCain and Obama on Health Care, points out that at least the discussion on health care will be about the right subject, cost, if the presidential race is between McCain and Obama.

Give you a 100% refund from your taxes of every dollar you spend on medical care, including insurance premiums.

Make it easier for your employer to deposit the money it now gives to the health insurance companies into a Health Saving Account that would belong to you

This money would come to you tax free — you could use it to fund your health care and your insurance premiums

This means your health insurance would belong to you, not your employerYou would have the money to pay small medical expenses with your Health Savings Account, which would allow you to reduce your insurance premiums by buying a Major Medical Plan, instead of a Cadillac Plan

You would also earn interest on the money in your Health Savings Account, tax free — you would get this interest instead of the insurance companies getting it (collecting interest on premiums is how the insurance companies make their money — these profits could be yours instead)

Plus, you would become your doctor’s customer, instead of the government or your insurance company being your doctor’s customer

This would place the consumer in charge, creating competition that would lower prices and improve quality

It’s ludicrous to think that the people who brought you 53.3 trillion dollars in unfunded Medicare and Social security debt can fix the health care problem by getting more involved in health care (especially when they are responsible for funding nearly half of our current health care expenditures) the most logical solution is to give the individual back the control of his health care, and let self-interest drive down the costs.

…it should come as no surprise that the greatest boom and bust in American history happened immediately following the Fed’s birth in 1913. Fed inflation put the inflationary “roar” in the “Roaring Twenties” followed by the biggest bust ever, the Great Depression.

All past inflations, booms, and busts were created through essentially the same process, including the recent stock market and housing bubbles. The Fed is simply the government’s latest-and-greatest tool for legalized counterfeiting.

How You Can End This Con-game

Imagine what would happen if FRNs had to compete with gold, a form of money that can’t be significantly inflated or deflated because of its scarcity and durability…

People would begin to have gold accounts that they would use to buy and sell. The ownership of the gold would be transferred back and forth using checks, debit cards, paper certificates (currency), and a few coins, just like with FRNs.

When you went shopping you would start to see two prices, one in FRNs and one in a certain weight of gold.

If the Fed inflated the number of FRNs you would see the FRN prices rise while the gold price would stay roughly the same.

You would begin to prefer to pay the gold price, so you would want to be paid in gold too.

How could the Fed stop the flight to gold? Only one way. Stop inflating the number of FRNs.

Congressman Paul has hit upon the easiest way to end inflation, and the booms and busts that follow in its wake. Simply repeal the legal tender monopoly enjoyed by FRNs, and the coinage monopoly held by the United States government. Allow monetary competition. Not only would this help to end inflation and recessions, it would also limit the ability of politicians to hide the true cost of government through the inflation tax. But that’s not all . . .

Forcing FRNs to compete with gold would also confer one other benefit. Over time the prices you pay will tend to fall as increases in economic efficiency (for example, technological improvements) lower the cost of production and increase the supply of goods and services. A stable money supply tends to become more valuable over time, unlike an inflationary currency that constantly loses value.

Both of these pieces of legislation would be a benefit to those of us seeking shelter from the continuing weakening of the dollar; which is probably why neither of them will see the light of day. Still, nothing happens without effort.

Tyler Cowen discussed his new Book Discover your Inner Economist in a recent CATO event. I haven’t read the book, but I found the event discussion quite engaging. The objections that I’ve had to beancounters for all of my life were touched on numerous times. They miss the portions of human interaction that can’t be quantified with numbers in a ledger, and consequently make wrong decisions when it comes to directing business expenses.

He’s in a CATO weekly video here discussing incentives within a family setting:

[My major beef with Shermer is a common problem that I’ve observed over time. He mistakenly uses the word ‘Altruism’ when he means ‘charity’ (“reciprocal altruism” should be “reciprocal charity”; as in a transaction where there is no profit outside the charitable benefit. Altruism is not charity]

This discussion is related to the discussion of health care and private markets, believe it or not. The average American is letting his desire for security override his common sense on this (and other) issues. Just figured I’d point out some resources for those who can’t wrap their heads around the idea of free markets.

I got slapped so hard by people who just love the idea of Single Payer Health care systems (and I don’t care what the Wiki article says on the subject. Tax funded health care is socialized medicine. Calling it anything else is attempting to sugarcoat the pill) when I sent out my Sicko comments the other day, I decided to do a little digging and see if I could find some hard evidence on the subject. Luckily I didn’t have to look too far.

CATO just happened to sponsor Health Care University 2007 about a month ago. If you listen to the podcasts, you might be shocked to learn a few things.

Suppose that instead of looking at health care policy as a means to push an ideology or score political points, we examine it from a pragmatic American vantage point. What works? What does not work? What backfires? Those are the good, the bad, and the ugly, respectively. The table below summarizes our experience in terms of three goals of health care policy: improving access to care; improving the quality of care; and lowering the cost of our health care system.

Access

Quality

Cost

Good

–clinics–vouchers–high-risk pools

data analysis

data analysis

Bad

–mandates–Medicaid–Medicare

P4P

cost containment

Ugly

national health services

malpractice suits

licensing regulations

A CATO scholar that thinks government can contribute positively to the health care problem? Shocking! But oddly, making very good arguments.Michael D. Tanner talks about what doesn’t work in the health care systems around the world. Things like innovation that isn’t available anywhere else but here. That there aren’t any single payer systems that work;

When you look at single payer systems, you can divide them into two categories, those that work, and those that are actually single payer systems.

In Canada, 800,000 people are on the waiting list for treatment. In the UK today, 40% of all cancer patients never get to see an oncologist (because they die before seeing them) (The UK NHS Wiki article shows the same heavy handed bias as the other article I linked to above. I’m thinking theres a gov’t employee who is paid specifically to insure that the wiki article on NHS stays pro-NHS. If everything is so good, why are there so many articles on NHS problems on the web?) in terms of survival rates, the US ranks number one in cancer survival, the UK ranks 16th.

[yeah, I want to emulate those systems]

The government health care systems that equate to the quality of the U.S. health care systems, like in France, feature co-payment plans with co-pays as high as 40%. This is not a single payer system. In fact, it’s not much different from the system we find ourselves in here in the U.S.

The problems with the U.S. system are problems that have been beaten to death already, as far as discussion goes. Mandates don’t work (Massachusetts is a stellar example of this) percentages of uninsured motorists exceed the percentages of those people who have no health insurance, in areas where automobile insurance is mandated.

Employer provided health insurance doesn’t work. It has given rise to the problems we currently have.

Just paying for the insurance has the same problems as employer provided insurance. Those who use the service do not have to pay the costs of the service. (and will be indistinguishable from any other gov’t welfare system; e.g. demand will far exceed supply, costs will spiral, and rationing will once again be necessary) This is also not a solution.

So, what is the solution? Well, Health Care University 2007 didn’t offer one (at least in the podcasts) but I would think that for the U.S., the solution is obvious. Get the government out of health care as much as possible. At least provide tax incentives for individuals to purchase their own health care, with plenty of choices; in other words, not just incentives for health insurance, but incentives for health savings accounts. (HSA’s are extremely unpopular with insurance companies, and insurance companies are active lobbyists. Consequently, you won’t hear about them during the evening news soundbites) Remove regulations that strangle the insurance industry. If you want more, visit CATO’s voluminous Research Areas on the subject.

As someone who pays for his (and most of his families) health care costs out of pocket, I have to say that it isn’t the day to day costs that are a problem; it isn’t even the “what if you child breaks a bone?” type accidents that are a problem.

No, the problem arises when you have a chronic ailment that requires costly procedures, and most of the time these types of ailments will get your insurance (under the current system) canceled. Of what use were those $300 a month family health care coverage payments worth then?

HSA, HSA, HSA. I don’t think I can repeat that enough. Let me save that money myself, and after a few years, I won’t even need insurance coverage other than catastrophic care (which I dare you to find these days. Seriously, have you seen one?) so why would I need government assistance at all?

We funded all the necessary functions of goverment for 150 years without one, why do we need on now? Beyond that even; what business is it, of anybodies, how much you make? Your employer needs to know so he can cut the checks, and you need to know so that you know how much you have to spend, save, invest, etc.

They tell you, in most corporations “don’t discuss wages with other employees, it’s a sensitive subject” but if I can’t talk about it with Bob over a beer, why would I want to discuss it with the tax man? Let alone be compelled to avow to it in writing on penalty of additional taxes being levied?

No thanks on that one. I think I’m pleading the fifth the next time the subject comes up.

The income tax needs to end (as well as 90% if the other taxes currently in existence) and not be replaced with anything. If they need additional funds to run the government, they can just sell more lottery tickets.

If you just want the information (especially since he’s not offering legal advice) it’s probably simpler to just go to this link to the ACLU and get their wallet card that covers the basics; such as:

IF YOU’RE STOPPED IN YOUR CAR

1. Upon request, show them your driver’s license, registration, and proof of insurance. In certain cases, your car can be searched without a warrant as long as the police have probable cause. To protect yourself later, you should make it clear that you do not consent to a search. It is not lawful for police to arrest you simply for refusing to consent to a search.

I can’t tell you how many times I’ve heard a sob story involving someone consenting to a search when they just knew their vehicle was clean. The answer should always be “I’m sorry, but I do not consent to a search”.

If you want to go beyond “police encounters 101” then you might want to check out the video at Flex Your Rights called Busted. I haven’t seen it myself, but the blurb on the website sounds interesting.

Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it. –George Santayana

This struck me as an appropriate quote to answer the inevitable questions of “why” one would go back in time and tarnish the good name of FDR by equating him with Hitler and Mussolini (and to some extent, Stalin) I have long thought that Roosevelt’s reign as president was anything but good; and it would be hard to paint many of his actions with a more dingy color than the facts already contain.

However, there are socialist instructors in our gov’t run schools to this day, and they insist on placing FDR on a pedestal and crediting him with ending the Great Depression and saving the world from fascism; when nothing could really be further from the truth.

FDR himself praised the Prussian-German model: “They passed beyond the liberty of the individual to do as he pleased with his own property and found it necessary to check this liberty for the benefit of the freedom of the whole people

The Great Depression only got to be the great depression through gov’t intervention in the markets, both before and after the stock market collapse in 1929; and it would be hard to say that FDR saved us from fascism when he was so enamored of it. Fascism exists to this day in the US because of this man; and it continues to persist because people refuse to learn from history, to their own detriment.

John Stossel picks up the gauntlet that Micheal Moore threw down, and slaps him silly with it; in less time than it takes to watch the over-rated ‘documentary’ Sicko. Here’s a quote from the online article:

There are many problems with health insurance, but that doesn’t mean we should put the government in control. If it’s decided that health care should be paid for with tax dollars, then it’s up to the government to decide how that money should be spent. There’s only so much money to go around, so the inevitable result is rationing.

It’s just the law of supply and demand. Lowering prices increases demand. Lowering the price to nothing pushes demand through the roof. Author P.J. O’Rourke said it best: “If you think health care is expensive now, wait until you see what it costs when it’s free.”

When health care is free, governments deal with all that increased demand by limiting what’s available.

I have watched both Sicko and Stossel’s 20/20 special. While the interviews with the individuals struggling with the problems of the healthcare system were emotionally compelling in Sicko; as usual, the emotional argument is used to blind the viewer to the real culprit in the problem.

Sick in America, John Stossel’s response to Sicko, lacks none of the passion that Micheal Moore pours into his film, and yet deals in clear truths and verifiable facts. He discovers the real culprit behind the healthcare crisis. The real culprit is government.

The Canadians lamenting the lack of insurance coverage in the US is a classic example of using emotion to obscure the real problem. Why doesn’t the Canadian socialized system pay for services rendered in the US? Or any other country? If it was truly free service for their citizens, it would be free wherever the need arose. This is true of all the socialized healthcare systems across the world. There is no charge to the end user, provided he goes to a funded provider; and that’s the catch. The government pays for the service through taxes, and rations the healthcare that is available based on the funds that are provided.

[this is also why drugs are cheaper in other countries. Prices are artificially lowered through agreements with those countries single payer systems. This should explain why the pharmaceutical companies don’t want to you to import Canadian drugs into the US. At some point they will simply stop providing the medication at reduced prices, since they can no longer profit from it’s production. Profit is why anyone engages in business in the first place, and healthcare is a business.]

The one thing Moore got correct in Sicko was the scathing criticism of the current health insurance system. Once again, he missed the real culprit. Government regulation has created the current health insurance system. HMO, PPO, etc; just more three letter acronyms for government created systems. If you agree to be covered by an HMO, then they, like the government in other countries, tell you who can treat you and for what.

I love the fact that he spent so much time in Europe. What a beacon of economic health France and the other European economies are. I also love the way he never addresses how much they pay in taxes for the lavish services provided. Sadly, it’s not that much more than we do here in the US for the lack of services that we have. That doesn’t mean we should pay more for better service. Logic should dictate that we demand to pay less, and provide our own ‘safety net’.

Let’s make something clear here; we are not Kaiser Permanente (Moore’s whipping boy of choice) In fact, the health care industry itself is not Kaiser Permanente. Based on the criminal behavior documented concerning Kaiser Permanente, I would think there would be charges filed somewhere against them. But then, their behavior is regulated and endorsed by the government. The same government that Moore thinks we should hand over the rest of healthcare to.

Only a dedicated socialist, like Micheal Moore, would consider it an indictment that we provide healthcare to prisoners, people held against their will (and as far as Gitmo detainees are concerned, held without charges) prisoners have no ability to provide for themselves, while citizens of the US do without healthcare; and, of course, the Cuban government bent over backward at Moore’s request to treat his boatload of sick people. What a media coup that is. Cuba heals the sick overlooked by America’s evil capitalist system; especially the neglected Ground Zero workers.

[My sister spent several years at Ground Zero, helping with the clean up effort. She, along with thousands of others still suffer from the after effects of being exposed to the air around Ground Zero; health problems that the government still denies has anything to do with working at Ground Zero. The government has lead the way towards disenfranchising those heroes of Ground Zero. The insurance companies are simply following the government’s lead, just like they always have.]

Except, of course, that the system might be evil, but it most certainly isn’t capitalist. All of the government managed systems are no different from the fascist corporatism of Il Duce‘s Italy; just another variant of socialism. Yes, the system currently in place is already a compromise. See how well it’s working? Don’t you want more of the same?

I’d like to speak for a significant portion of America’s uninsured. We don’t want universal health care. Some of us are uninsured by choice. The cost of insurance outweighs the benefit provided by insurance. (The only way the cost is justifiable is if a family member has some long term expensive-to-treat disease, and then the insurance company disallows coverage based on some obscure clause in the policy. I have seen this happen before) Forcing us to contribute to a universal system through a greater tax burden will simply drive us further into poverty. We want the freedom to choose what we want insured, and to get the same tax benefits as any other insurance provider. We want to negotiate prices directly with our doctors and hospitals, and we want the choice to remain uninsured if we deem it necessary.

Let charity provide the ‘free’ services. Only charity really can. All other arrangements involve the use of force on one or another of various groups. This is unacceptable to those of us who believe force should not be involved in normal social relationships.

It’s worth mentioning that I followed the sentiment of Micheal Moore in his film, and refused to pay for the privilege of viewing his film, just as he does not wish to pay for the privilege of getting healthcare service. Instead I found an alternative source for the material. Anybody with access to a torrent program may do the same. I don’t reward thieves for promoting government as their method of choice.

John Stossel’s special has been broken into segments and is available on YouTube. Let him know you support his views by contacting him at ABC.